Growth isn’t possible: Why rich countries need a new economic direction

From birth to puberty a hamster doubles its weight each week. If, then, instead of levelling-off in maturity as animals do, the hamster continued to double its weight each week, on its first birthday we would be facing a nine billion tonne hamster. If it kept eating at the same ratio of food to body weight, by then its daily intake would be greater than the total, annual amount of maize produced worldwide.

There is a reason that in nature things do not grow indefinitely.

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Yet the entire canon of mainstream contemporary economics seems to believe that economics exists independent of the laws of biology, chemistry and physics. It assumes, without exception, that infinite economic growth on a finite planet is both desirable and possible.

In economics ‘growth’, or the lack of it, describes the trajectory of Gross Domestic Product and Gross National Product, two slightly different measures of national income (they differ, basically, only in that one includes earnings from overseas assets). An economy is said to be growing if the financial value of all the exchanges of goods and services within it goes up. The absence of growth gets described, pejoratively, as recession. Prolonged recessions are called depressions.

Yet, it is not that simple. An economy may grow, for example, because money is being spent on clearing up after disasters, pollution, to control rising crime or widespread disease. You may also have ‘jobless growth,’ in which the headline figure for GDP rises but new employment is not generated, or environmentally destructive growth in which a kind of false monetary value is created by liquidating irreplaceable natural assets on which livelihoods depend.

The fact that an economy is growing tells you nothing about the ‘quality’ of economic activity that is happening within it. For example, research by nef’s (the new economics foundation) centre for well being shows that the link between rising GDP and higher life satisfaction in developed nations broke down decades ago.

Research also by nef highlighted a flaw at the heart of the general economic strategy that relies upon global economic growth to reduce poverty. The distribution of costs and benefits from economic growth, it demonstrated, are highly unbalanced. The share of benefits reaching those on the lowest incomes was shrinking. In this system, paradoxically, in order to generate ever smaller benefits for the poorest, it requires those who are already rich and ‘over-consuming’ to consume ever more.

Every doubling in the global economy, as it is currently measured; we use the equivalent in resources of all of the previous doublings combined.  For modest growth rates of 3 per cent each year, common to developed economies, the doubling period is around 23 years. For higher growth rates of 10 per cent, more common to developing economies, the doubling period is approximately 7 years.

In a unique study, published in the science journal Nature in September 2009, a group of 29 leading international scientists identified nine processes in the biosphere for which they considered it necessary to “define planetary boundaries”. Of the nine, three boundaries had already been transgressed: climate change, interference in the nitrogen cycle, and biodiversity loss. Clearly, anyone who thinks the Earth can take another doubling of the global economy is, as economist Kenneth Boulding famously stated, ‘a madman or an economist.’

To illustrate this, and in the context of climate change a new report from nef looks in detail at the relationship between economic growth and the need to avert catastrophic climate change. Based on the leading models for climate change and the global economy’s use of fossil fuels, the report – called Growth Isn’t Possible – comes to a seemingly inescapable and self-explanatory conclusion.

It asks whether global economic growth can be maintained, while keeping a good likelihood of limiting global temperature rise to 2° C  – the agreed political objective of the European Union, and widely considered the maximum rise to which humanity can adapt without serious difficulty.

The report shows that none of the scenarios studied, including the most optimistic variations of low-carbon energy and efficiency, could square the circle of endless global economic growth with climate safety. This is, in part due to the fact that over the last decade, carbon intensity (carbon per unit of GDP) has not gone down, it has generally flat-lined and, in some years, even gone up. This is the result of rapid economic growth in developing nations such as India and China who fuelled their economic boom with carbon intensive coal. However, globally, there has also been a lack of investment into low carbon energy infrastructure such as solar or wind energy.

At the same time improvements in energy intensity of the economy (energy per unit of GDP) has slowed – implying we may be approaching efficiency limits in both the supply side (e.g. power station) and demand side (e.g. domestic appliances). So, for all the promise of magic bullet technologies such as biofuels, carbon capture and storage and nuclear, and ever improving energy and resource efficiencies; continual growth drowns out energy and natural resource efficiency gains.

Unending global economic growth, it would seem therefore is not possible, but also neither desirable nor necessary. If you have any doubts, ask a hamster.

* This article originally appeared in the Food Ethics Council magazine.

For more information about nef’s report Growth isn’t Possible, please go to nef’s website – An animation of the Impossible Hamster, created by Andrew Simms and Victoria Johnson and animated by Leo Murray, please go to or watch below…

3 Responses to “Growth isn’t possible: Why rich countries need a new economic direction”
  1. dwighttowers says:

    Well done you! Will fwd to various folks.

Check out what others are saying...
  1. […] Both Kahan and Crompton’s reveal that communication of issues like climate change is no easy feat. How we frame issues could potentially undermine the very actions campaigns seek to motivate. But, in favor of Crompton’s argument, there seems little point in selling an idea – that green growth is possible – particularly when the biosphere is screaming out that it’s not. […]

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  • November 2010
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